Claim Employment Allowance director of 2 companies

Can I Claim Employment Allowance director of 2 companies

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Hi All,

I quote from https://www.gov.uk/claim-employment-allowance/eligibility 

"If you have more than one payroll

If you have or had more than one employer PAYE reference, the total employers’ Class 1 National Insurance liabilities for your combined payrolls must be less than £100,000 in the previous tax year

You can only claim Employment Allowance against one of the payrolls."

I confuse the second point here means I only can claim for one of his companies?

Any comment would be appreciated.

Thanks,

Hung

Replies (17)

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By Duggimon
18th Jun 2021 10:52

If the two companies are under common control then only one can claim the employment allowance.

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Replying to Duggimon:
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By Paul Crowley
18th Jun 2021 11:33

Best appoint a new director from the Philippines.

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Replying to Paul Crowley:
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By Nadlee
30th Oct 2022 09:56

I know this post is old, but is now relevant for me.

Would adding a director solve the company being connected?

From what I have seen on HMRC this could help, as long as linked directors hold less than 50% control.

Does anyone have anything to comment on this?

Thanks

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Replying to Nadlee:
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By Hugo Fair
30th Oct 2022 11:53

The relevant HMRC guidance is at https://www.gov.uk/government/publications/employment-allowance-more-det... ... and you should read it ALL.

BTW are you seriously considering that you (or your client) should give up control of a company solely in order to be eligible to claim EA?

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By SXGuy
18th Jun 2021 11:37

I think you have a bigger question that you didn't ask in relation to the title of this topic.

You can't claim EA for a director unless they have other employees who are paid above a certain level.

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Replying to SXGuy:
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By legerman
18th Jun 2021 12:56

SXGuy wrote:

I think you have a bigger question that you didn't ask in relation to the title of this topic.

You can't claim EA for a director unless they have other employees who are paid above a certain level.

To be pedantic, two Directors above the primary threshold can claim Employers Liability.

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By legerman
18th Jun 2021 12:57

Duplicated

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By legerman
18th Jun 2021 13:00

Triplicated

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By legerman
18th Jun 2021 13:01

Quadruplicated

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Replying to legerman:
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By SXGuy
18th Jun 2021 15:14

Yes that's true. Thank you for your pedantisim(?)

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By legerman
18th Jun 2021 13:02

Quintuplicated

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By legerman
18th Jun 2021 13:03

S extuplicated!!

Actually I see how this happens now. You press the submit button and nothing happens, so you press it again etc. Finally it goes through and you find you have 5 duplicated posts

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By Hugo Fair
18th Jun 2021 12:20

You really need to read the whole of the guidance at the URL you've provided (not just select the bits you want) ... and preferably look at the actual legislation that underpins it.

In terms of the guidance:
* the statement "You can only claim Employment Allowance against one of the payrolls" is within a section for when one company has multiple payrolls.

* in the section "Who cannot claim Employment Allowance", you'll find:
"You also cannot claim if both of the following apply:
- you’re a company with only one employee paid above the Class 1 National Insurance secondary threshold; and
- the employee is also a director of the company."

* and per your original question, in the section "If you’re part of a group", you'll find:
"If you’re part of a group of charities or companies (also known as connected companies) .. only one company in the group can claim the allowance."

So, based on the limited info in OP, your client cannot claim two lots of EA ... but may not even be entitled to one lot of it.

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Replying to Hugo Fair:
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By User deleted
18th Jun 2021 14:25

Thanks for your good comment. I read and checked 2 of his companies are satisfied all condition. But the point I confuse "You can only claim Employment Allowance against one of the payrolls.". I am not sure can only one of his company claim employment Allowance? not two. Is that right?

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Replying to User deleted:
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By Hugo Fair
18th Jun 2021 14:51

One last time ...

* The statement "You can only claim Employment Allowance against one of the payrolls" is within a section for when one company has multiple payrolls.
In other words (and NOT the scenario you appear to be describing) ... if a single company has more than one PAYE scheme (which can occasionally be the case), then the EA (which is normally claimable per PAYE scheme that meets the eligibility criteria) is restricted to only being claimed by one of the PAYE schemes.

Of more relevance to your client's scenario:
* You ask: "I am not sure can only one of his company claim employment Allowance? not two. Is that right?"
I've already pointed out that: "If you’re part of a group of charities or companies (also known as connected companies) .. only one company in the group can claim the allowance."
So you need to ascertain whether your client's two companies are 'connected' (in the legal not colloquial sense). If so, which sounds likely, then EA can only be claimed by one of the companies.

* BUT, again as I've already said, the eligibility to claim EA even for one company is dependent on its meeting some basic criteria - including that the company has at least one employee (other than the Director) who is paid above the Class 1 NI secondary threshold.

So, it is quite possible your client isn't entitled to claim EA for even one company (let alone for both of them).

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By User deleted
18th Jun 2021 15:15

I got your answer for my case. Thank a lot

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By SteveHa
18th Jun 2021 12:32

Employment allowance has been around since 2014, and the rules are clear by now, as anyone with clients should know.

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